20220901-招银国际-伊利股份-600887.SH-2Q_largely_in_line__and_yet_a_revised_2H_outlook_prompts_for_an_earnings_cut_5页_962kb

报告摘要

Yili Industrial (600887 CH) Summary

Core Content

Yili Industrial (600887 CH) reported 2Q22 results and revised its 2H22 outlook. The company guided for double-digit revenue growth in the second half of 2022 and a flattish NPM for the full year. Despite a sequential improvement in July sales, macroeconomic uncertainties continue to affect domestic consumption sentiment.

Main Points

2Q22 Performance:
- Revenue: RMB32.4bn (+11% YoY)
- Net profit: RMB2.6bn (+5% YoY)
- Core revenue and net profit growth: 5% each
- Frozen dairy and IMF (International Milk Federation) recorded strong growth of 30% and 80%+ respectively
- Liquid milk declined by 4.5% YoY
2H22 Outlook:
- Revenue growth expected to be double-digit
- NPM expected to remain flat
- Consumer health awareness may limit liquid milk demand
- New SKU launches aim to defend yogurt market share
- Growth in frozen dairy and IMF could slow
Earnings Revision:
- Revenue cut by 4.6% for 2022E
- GPM increased by 0.3pp to 31%
- Opex ratio rose by 0.4pp
- Net profit estimate reduced by 6.5%
Valuation:
- Target Price (TP) revised to RMB43.0 (from RMB47.0)
- TP based on 25.5x mid-23E PE (from 28.5x)
- Valuation benchmarked to 3-year average

Key Financial Metrics

Metric	FY20A	FY21A	FY22E	FY23E	FY24E
Revenue (RMB mn)	96,886	110,595	123,668	138,475	154,376
YoY growth (%)	7.4	14.2	11.8	12.0	11.5
Net income (RMB mn)	7,078	8,705	10,076	11,910	14,368
EPS (RMB)	1.2	1.4	1.5	1.8	2.2
YoY growth (%)	2.0	23.0	8.1	18.2	20.6
P/E (x)	na	na	23.2	19.6	16.2
P/B (x)	na	na	4.3	4.0	3.8
Net margin (%)	7.3	7.9	8.1	8.6	9.3
ROE (%)	23.3	18.2	19.8	22.1	25.0
Dividend yield (%)	na	na	3.0	3.8	4.6

Financial Highlights

Gross Margin: Increased to 31.0% in 2Q22 from 30.7% in FY22E
Operating Margin: Rose to 8.8% in 2Q22 from 8.3% in FY22E
Net Margin: Improved to 8.1% in 2Q22 from 7.3% in FY22E
EPS: RMB1.5 for FY22E, up from RMB1.2 in FY20A
Net Profit: RMB10,076mn for FY22E, up from RMB7,078mn in 2Q22

Key Ratios

Ratio	FY20A	FY21A	FY22E	FY23E	FY24E
Gross margin (%)	29.8	30.3	31.0	32.1	33.1
Operating margin (%)	8.2	8.1	8.8	9.8	10.7
Pre-tax margin (%)	8.4	9.1	9.5	10.0	10.9
Net margin (%)	7.3	7.9	8.1	8.6	9.3
ROE (%)	23.3	18.2	19.8	22.1	25.0
EV/EBITDA (x)	na	na	16.1	13.2	11.0

Operational Insights

GPM Increase: Driven by higher contribution from IMF
Opex Ratio: Increased by 1.6pp due to promotional expenses and consolidation from Ausnutria
Raw Milk Price: Slight decline in 2Q22, but offset by rising input costs
Future Price Trends: Raw milk prices may rise in 2H22 due to mild demand recovery, but expected to stabilize in the long term

Share Performance

1-month: +1.2%
3-month: -1.8%
6-month: -2.4%

Stock Data

Market Cap (RMB mn): 260,582
Avg 3 mths t/o (RMB mn): 1,739
52w High/Low (RMB): 42.15/33.93
Total Issued Shares (mn): 6,399

Shareholding Structure

Shareholder	% Ownership
HKSCC	17.9%
Hohhot Investment Co.	8.4%
Pan Gang	4.5%

Analyst Ratings

CMBIGM Rating: BUY (maintain)
Target Price: RMB43.0 (+20.1% Upside from current price RMB35.7)

Disclaimer

The report is for informational purposes only and not investment advice
CMBIGM is not liable for any loss or damage arising from reliance on the report
Past performance does not guarantee future results
The report may include assumptions and is subject to change

Conclusion

Yili Industrial's 2Q22 results were largely in line with expectations, but the revised 2H outlook led to a downward adjustment in earnings estimates. The company is expected to maintain its core revenue growth, supported by strong performance in frozen dairy and IMF, while facing challenges in liquid milk due to consumer behavior and macroeconomic factors. Despite the earnings cut, the company's valuation remains attractive, and the BUY rating reflects its potential for outperformance.

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